Coping with Therapy Caps

What physical therapists need to know- and do

View Comments (9)Print ArticleEmail Article
Section Sponsored by:

It was like déjà vu all over again for physical therapists this past December when Congress once again extended the Sustainable Growth Rate (SGR) "fix." The three-month fix -- good until the end of March -- does prevent implementation of the 20% Medicare payment cut many feared, and also extends the current Medicare therapy cap exceptions process.

While good news on one hand (no draconian cuts), this does create the ongoing challenge all physical therapists face when it comes to ensuring full and optimal treatments for patients within strict Medicare guidelines and mandates.

But there are important facts for all physical therapists to know and key steps to take. Here is an overview of what physical therapists should know and do over the next few months . . . until it is decided what will be done for the remainder of the year.

 What is the Medicare Therapy Cap and MMR

The Therapy Cap was initially created to ensure there was no over-billing of Medicare or patients.  Under the cap, patients may receive outpatient physical therapy until they reach a therapy cap of $1,920.  Once that amount is met, physical therapists are asked to use the KX modifier, which indicates medical necessity, on all claims submissions.  Once the claim reaches $3,700, it is subject to automatic Medical Manual Review (MMR).  At any time, a reviewer may request documentation.

It should be noted, however, that the cap encompasses any physical and speech therapy treatments into a single cap, while OT has its own cap. So if a patient has a stroke and has undergone both PT and speech therapy - even if it is not simultaneous treatment -- those treatments count toward the cap. It also does not matter where those treatments are received: in an outpatient setting of a hospital or nursing home, or in a private practice, again, all treatments apply toward the cap.

 Further complicating this process is that in 11 states, as well as under guidelines set by some health plans, PT treatments must go through a prepayment authorization process once the $3700 MMR limit is reached, which means the claim will not be paid until the chart is reviewed. The rest of the states have post-payment review, which means that payment may be rescinded if the care is not approved.

 With such strict guidelines, many therapists question why they would continue providing services knowing that Medicare could determine that the treatments were not medically necessary.  And for those thinking they will just turn to patients for payment -- that may not work either.  Medicare rules say that if the therapy provided is a service Medicare pays for, i.e. a covered benefit, then the therapist cannot collect from patients.

So with all these guidelines and measures, how can therapists remain compliant, ensure they are paid for treatments and, of greatest importance, ensure they provide the therapy their patients need? 

 Steps to Survive Medicare Therapy Caps and MMR

There are solutions. Here are some important steps physical therapists can take:

 1.Document fully and completely.  Remember that in general, the more documentation you provide reviewers, the better. It is often not enough to show a specific treatment was provided.  The chart must show not just that a patient injured his or her knee, but, for example, that the pain limits the ability of the patient to walk up stairs to his/her home, go to grocery store, or engage in other normal activities without significant pain.

2. Define goals for the patient.  Ensure the goals focus on what patient needs to do in his or her daily life. Medicare is interested in functional goals.  Note in the chart that a goal is to have the patient walk to the corner store with no pain, for example.  Also emphasize why it's important patients reach established goals such as, "patient lives alone" or "patient is caregiver to ill spouse."

3. Consider sending charts with summaries and cover letter summarizing care.  Make the process as simple and clear as you can for the reviewer, and don't forget to include co-morbidities, why the patient may need extended treatment, and unique living conditions.  Do not just send copies of daily notes. Put the important information about the claim up front so the auditor will not have to thumb through the chart and notes.

4. Make sure materials are legible.  You do not want to give the auditor any excuse to deny the claim or request resubmission.

5. Do not assume your front office knows what to send to auditors.  Provide detailed and frequent training to staff -- and make sure they keep you in the claims process loop.

6. Be wary of actions that look like you are basing treatment solely around the therapy cap. Medicare will take issue with trends outside the norm.  Medicare has the ability to assess treatment trends of individual practices and investigate practices that are aberrant, such as stopping all treatment once the patient has reached the cap or the $3700 threshold.

7.Get creative in how you provide care to patients. PTPN is promoting strategies that help therapists transition patients, when appropriate, from a covered therapy benefit to wellness services that are paid for by the patient. These may include group therapy for seniors -- or open sign up for use of office equipment (often for modest fee) for those patients in the middle of therapy and who already have familiarity with exercises and equipment. Or consider partnering with local health clubs or organizations you have vetted that may offer appropriate exercise options for qualified patients. 

Other Issues to Consider

Medicare does have an appeals mechanism for claims denied under MMR. However, after the first few appeals levels, it may require attorney involvement. So before going that route, look at the financial benefits of going through the appeals mechanism.

Also Online!

G-codes Explained

Practice managers, software companies react to new Medicare billing regulations.

While some may think it is simpler to no longer see Medicare patients that too could present problems. Therapists in competitive markets may not want to alienate physicians who may simply send all their patients to the PTs in their area who are still taking Medicare. Therapists must of course also consider ethical obligations. While it is understandable that some may simply want to avoid Medicare, it's important to think carefully about the long-term ramifications.

The Future of the Therapy Cap and MMR

While it's difficult to predict what Congress might announce in March, most industry analysts believe the therapy cap as well as the exceptions process and MMR will be extended again.  The system is simply too complicated and there is little time to create a new solution on such short notice.

In addition, few policymakers want the cap eliminated unless there is a mechanism in place to replace it.  So, while it has been said before and will be said again, now is the time for all therapists to get politically active. Reach out to your legislators - ensure they are aware of the situation their Medicare constituents and healthcare providers in their community are facing. Urge them to extend the therapy cap exceptions process through the end of the year, then to develop a bipartisan effort to address the current outmoded SGR system and therapy cap so that all providers can move forward.

 Working together, we can ensure that legislators understand how PTs help improve the health and quality of life for patients, and that they hear our voices so that we can continue to provide vital services to all of our patients.

Mitch Kaye is director of quality assurance at PTPN, a network of rehabilitation therapists in private practice. For more information, call 800-766-PTPN or visit www.ptpn.com.



While I appreciate a "transition" to wellness services, one must not side-step "medically necessary" care. I have had a family member get transitioned to affordable "in house" fitness services while side stepping her medically necessary PT care. His decision was based on limiting his paperwork for justifying continued care above the cap........

Pam Wood,  Owner,  hand N Hand TherapyMarch 27, 2014
Arlington, VA


zulman  avani,  pensiunanFebruary 11, 2014
tasikmalaya, OH

Let's face it. Medicare reviewers are paid to try to prove fraud and they have no incentive to help the independent provider. We are small practices that are easy to pick on and they know we can't afford to hire attorneys to fight our battles. It feels like big brother is always out to get us. Paranoia is not a fun way to live and work.

Susan Huffman,  President,  BodyWise StudiosFebruary 07, 2014
St. Augustine, FL

Read all comments (9) >>


Email: *

Email, first name, comment and security code are required fields; all other fields are optional. With the exception of email, any information you provide will be displayed with your comment.

First * Last
Title Field Facility
City State

Comments: *
To prevent comment spam, please type the code you see below into the code field before submitting your comment. If you cannot read the numbers in the below image, reload the page to generate a new one.

Enter the security code below: *

Fields marked with an * are required.

View the Latest from ADVANCE


Search Jobs